Date: Dec 21, 2009
Alcoa announced it has formed a joint venture with
Ma’aden, the Saudi Arabian Mining Company, to develop a fully integrated,
world-class aluminum industry in the Kingdom of Saudi Arabia. The joint venture
will become the world's preeminent and lowest-cost supplier of primary aluminum,
alumina and aluminum products, with access to the growing markets of the Middle
East and beyond.
“Alcoa’s partnership in all aspects of this integrated industry brings
with it enormous value not only in terms of technology, resources and experience
but also a proven commitment to sustainability.”
In its initial phases, the joint venture will develop a fully integrated
industrial complex, including:
- A bauxite mine with an initial capacity of 4,000,000 metric tons per year
(mtpy);
- An alumina refinery with an initial capacity of 1,800,000 mtpy;
- An aluminum smelter with an initial capacity of ingot, slab and billet of
740,000 mtpy; and
- A rolling mill, with initial hot-mill capacity of between 250,000 and
460,000 mtpy. The mill will focus initially on the production of sheet, end
and tab stock for the manufacture of aluminum cans, and potentially other
products to serve the construction industry. It will be one of the most
technically advanced mills in the world.
The refinery, smelter and rolling mill will be established within the new
industrial zone of Raz Az Zawr on the east coast of the Kingdom of Saudi Arabia.
The complex will utilize critical infrastructure, including low-cost and clean
power generation, as well as port and rail facilities, developed by the
Kingdom’s government. Bauxite feedstock for the planned alumina refinery will
be transported by rail from the new mine at Al Ba’itha, near Quiba, in the
north. The project will be developed and financed in two phases, with the
rolling mill and smelter in the first phase. First production from the aluminum
smelter and rolling mill is anticipated in 2013, and first production from the
mine and refinery is expected in 2014.
Capital investment is expected to be approximately SAR 40.5 billion ($US 10.8
billion), subject to the completion of detailed feasibility studies and
environmental impact assessments. Ma’aden will own 60 percent of the joint
venture. Alcoa will control the remaining 40 percent of the joint venture
through an investment partnership in which it will own 20 percent and its
partners will participate through financing that represents the other 20 percent
economic interest. Each of Alcoa and the partners will invest $900 million over
a four-year period and will be responsible for their pro rata share of the
project financing, in addition to specific completion commitments.
In welcoming the new venture, Dr. Abdallah Dabbagh, President and CEO of
Ma’aden, said, “Alcoa’s partnership in all aspects of this integrated
industry brings with it enormous value not only in terms of technology,
resources and experience but also a proven commitment to sustainability.” He
added, “A focus on quality alongside the robust economics of the project
will ensure its leading role in advancing Saudi Arabia and the region as a major
hub for the aluminum and downstream sectors.”
Alcoa President and CEO Klaus Kleinfeld said, “This joint venture is a
once-in-a-generation opportunity for Alcoa, for Ma’aden and for the Kingdom of
Saudi Arabia. We are creating a fully integrated aluminum complex that will be
the most technologically advanced and cost efficient in the world. By changing
the operating dynamics and cost base within our industry, the complex will be a
model for the growth of aluminum in competition with other metals and is
designed with the potential for future expansion. The joint venture leverages
the unique strengths of both Alcoa and Ma’aden to create substantial value for
our investors, customers and partners.”
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